Chinese Portal Buys Australian Firm
The Hong Kong-based company, which has offices in 10 countries, including Japan and the United States, raised cash from successful IPOs in the United States and Hong Kong early last year before the high-tech bubble burst.
It also has received money and support from shareholders, including AOL, venture capitalists Edelson Technology and New World Infrastructure, and China's Xinhua news agency. 24/7 Media handles the portal's online advertising.
The company has been looking to invest some of its money ever since Congress approved permanent most favored nation trade status for China last summer. CEO Peter Yip said at the time that he was looking at 100 companies for investment or acquisition.
Since then, Chinadotcom has whittled that number down to about half a dozen companies that "make sense to our existing business," said chief financial officer Daniel Widdecombe.
RNR International Marketing will add more than 12 million e-mail addresses to Chinadotcom, giving the new owners a list of almost 22 million addresses and making it one of the largest list companies in Asia.
The new asset, a company statement said, "is expected to become a foundation of chinadotcom's e-marketing initiative to accelerate the building of its e-marketing business in the rapidly expanding online DM space."
Peter Hamilton, Chinadotcom's chief operating officer, told CBS MarketWatch that "these guys can help us develop our own media, plus they have their own media, plus they have the skills of working with other companies.
"The mail lists and their record of achievement will be key to driving our continued growth and [position] us to be a much larger player, both in Australia and regionally."
In addition to addresses and profiles from Asian and Australasian businesses and consumers, RNR will bring in joint ventures with Australian and Chinese government agencies. Chinadotcom also expects to cross-sell services to RNR private clients such as Cathay Pacific airlines.
Terms of the cash and stock acquisition were not disclosed, but privately held RNR is profitable and could help chinadotcom's battered stock, which traded around $4.50 on the Nasdaq at year-end, down from its 52-week high of $78.
China portals have taken a beating on global markets along with other high-tech issues, but Chinadotcom seems better positioned to survive, thanks to its substantial cash pillow.
Reliable figures on the number of Chinese online are still hard to get, with the latest estimate at about 16 million. But with a population of 1.3 billion, the potential is hard for Internet companies to ignore.